6 Stocks to Trade When the Markets Resume Tuesday >>> READ MORE

5 Top Stock Trades for Tuesday: GE, GM and Cyber Monday

Here are the top stock trades we’re watching for Tuesday morning

By Bret Kenwell, InvestorPlace Contributor


Stocks are roaring higher on Cyber Monday, as strong online sales are buoying bulls’ hope for a year-end rally. One day isn’t enough proof, but it’s a good start for investors. Let’s take a look at our top stock trades for Tuesday.

Top Stock Trades for Tomorrow #1: Amazon

top stock trades for AMZN stock

The leader in e-commerce continues to grow its share of the pie, as online sales continue to maintain strong momentum. Like other tech stocks, bulls are hoping last Tuesday’s low in Amazon (NASDAQ:AMZN) marks the low in this correction.

Last week, shares of Amazon opened near $1,425 before rallying back toward $1,500 on the day. It chopped higher the rest of last week before Monday’s 5% pop. Based on the action now, it wouldn’t be surprising to see AMZN retest its 200-day moving average just below $1,700 and perhaps downtrend resistance.

While that action wouldn’t be a stretch, it’s what AMZN does after that that matters. I need to see shares stay above $1,500 now to become more constructive.

Top Stock Trades for Tomorrow #2: General Motors

top stock trades for GM stock

Although it comes with a $3 billion to $3.8 billion charge, General Motors’ (NYSE:GM) restructuring plan has Wall Street rejoicing, pushing shares higher by roughly 6%. Can the good times continue?

Over $37 and the 200-day moving average is a good start, but the $38.50 level looks like a tough nut to crack. That’s okay though. On the stock’s post-earnings move, we said we were buyers on a retest of the 50-day moving average. We got our chance (blue circle) and now GM is moving nicely. So long as it stays above the 200-day moving average, investors can stay long.

Top Stock Trades for Tomorrow #3: General Electric

top stock trades for GE stock

Another “General” in the market is General Electric (NYSE:GE), and unlike GM, the action isn’t so great on Monday.

On the plus side to Monday’s 1.5% decline is the fact that GE stock is well off the 52-week lows it made earlier in the session near $7.25. The downside of course, is that GE hit new multi-year lows on a day where stocks are solidly in the green.

I remain firmly in the do-not-buy camp, and am watching these three signals on when to buy. As for the charts, a rally back to $9 could eventually be in the cards, but even so, double-digit prices seems a long ways off.

Avoid GE for now.

Top Stock Trades for Tomorrow #4: Overstock

top stock trades for OSTK

Shares of Overstock (NASDAQ:OSTK) have been wildly volatile the past few days, soaring double-digit percentages on Friday before dropping almost 16% on Monday. The action is concerning, to say the least.

At this point, there are other stocks that look more attractive than OSTK, even with shares above $14.50 support and hovering near $17.50 support. Just because shares are holding up over the backside of downtrend resistance doesn’t mean it’s a good long. They can continue trending lower until the stock puts in a higher low.

For now, the 50-day moving average continues to act as resistance. See if it can clear that while holding support.

Top Stock Trades for Tomorrow #5: Mallinckrodt PLC

top stock trades for MNK

Mallinckrodt PLC (NYSE:MNK) has traded very technically since its big spike higher in August. However, it’s violating support on Monday.

A decline down to and close above $25 would have been a solid risk/reward buying opportunity for bulls. However, shares broke right through this level and tumbled to $23.

While it’s finding support on the backside of prior downtrend resistance, the swift knifing through $25 is a concern. Investors who go long here or are eyeing a position need to watch two things: How does MNK trade near $25 (is it support or resistance) and will the 200-day moving average hold as support?

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GM and AMZN. 

Article printed from InvestorPlace Media, https://investorplace.com/2018/11/5-top-stock-trades-ge-gm-amzn-mnk-ostk-cyber-monday/.

©2019 InvestorPlace Media, LLC